OMAHA, Neb. (AP/KSDK) - ConAgra Foods is buying private-label food producer Ralcorp, based in St. Louis, for about $4.95 billion, which will make it the biggest private-label packaged food business in North America.
ConAgra says the acquisition will strengthen its overall position in the North American packaged food business. ConAgra brands include Chef Boyardee, Egg Beaters, Peter Pan and Reddi-wip.
ConAgra Foods Inc. said Tuesday that it will pay Ralcorp Holdings Inc. stockholders $90 per share, a 28 percent premium to its Monday closing price. Ralcorp's stock jumped 26.5 percent in premarket trading.
The combined company will have total sales of about $18 billion annually.
The companies value the transaction at about $6.8 billion when debt is included.
Mayor Francis Slay plans to meet with ConAgra officials this week, possibly on Wednesday.
"There could be some employment loss, but we're going to do what we can to try to stem that as much as we possibly can," said Mayor Slay.
"The upside is that it could mean more jobs for St. Louis. When you look at what's going on with the InBev Anheuser-Busch acquisition, initially there were a lot of fears on job loss in St. Louis, but what we've seen is a company that continues to grow," said Scott Harrison of Argent Capital Management.
In a joint statement, Ralcorp's Kevin Hunt said, "This combination delivers immediate and compelling cash value to our shareholders and benefits to our customers and employees."
The deal is expected to close by March 31, 2013 and needs Ralcorp shareholder approval.
Ralcorp's headquarters is located in the Bank of America Plaza in downtown St. Louis.
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